Sunday, May 25, 2014

Grant Hill's Big Money Backers for Clippers Revealed

ESPN.com is reporting that Southern California businessmen Tony Ressler and Bruce Karsh are two investors in the Grant Hill-led consortium that plans to make a bid to purchase the Los Angeles Clippers.  Ressler co-founded two private equity firms and is a minority owner of the Milwaukee Brewers.  Forbes recently estimated Ressler's net worth at $1.29 billion.

Bruce Karsh, who heads up another asset management firm, also serves on Duke University's Board of Trustees.  Perhaps the Duke University connection is what brought Grant Hill into contact with Karsh.  Forbes estimates Karsh's net worth at $1.8 billion.

Ironically, considering the controversy over Donald Sterling's remarks, with estimates that the bidding for the Clippers could start at $1.5 billion, Donald and Shelly Sterling appear poised to command a premium price for the sports franchise despite the forced sale.

http://espn.go.com/los-angeles/nba/story/_/id/10980305/grant-hill-tony-ressler-bruce-karsh-form-group-interested-buying-los-angeles-clippers

Mental Floss estimated the Clippers value at $430 million just a few weeks ago.  http://mentalfloss.com/article/53477/how-owners-all-30-nba-teams-made-their-money

It will be stunning if the Sterlings get more than $1.5 billion for the Clippers, and even $1 billion might be too much.  Having to share the Los Angeles market with the Los Angeles Lakers should impair the value of the franchise compared with teams that have exclusive rights in comparable markets, like the Chicago Bulls.  However, considering the NBA's potential for international expansion, the popularity of the NBA in China, and the favorable economics for NBA franchises (82 regular games a year; plus only a few premium contracts per roster), one can understand why investors are eager to become owners of an NBA franchise.

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